Narendra Modi’s economic plan shows no new ideas

The vision of India that Narendra Modi has outlined is a lot like the palace produced by the genie. It can have anything and everything.

Aladdin asked the genie of his lamp to conjure up a new palace grander than the emperor's, so that he could win the princess' hand. There was no architectural, aesthetic or hedonistic feature that the genie could not provide.

The vision of India that Narendra Modi has outlined is a lot like the palace produced by the genie. It can have anything and everything. It is sui generis, meaning it does not have to grow out of a real-world process. It doesn't entail trade-offs, it has no warts. Fairytales are closer to reality — they contain lurking sorcerers. A few Modi promises are straight off the editorials of ET: the need for new towns, a gas pipeline network across the country to not only create a market for a relatively clean fuel but also to do away with costly, subsidised cooking gas in cylinders, the superiority of preventive health over health insurance as spending priority, for example. These are beyond criticism, naturally.

A national broadband network is already being rolled out. The spread of institutions of educational excellence is underway. The number of central universities has gone up from 17 in 2004 to 44 in 2013, the number of IIMs from six to 16, IITs from seven to 16. Modi gave credit to Vajpayee for the Golden Quadrilateral. But the North-South and East-West corridors and the Golden Quadrilateral were part of the paper shuffled between the ministry of surface transport and the Planning Commission in the early 1990s.

Vajpayee deserves credit for empowering the National Highway Authority of India and for thinking up the Pradhan Mantri Gram Sadak Yojana. The construction of all-weather rural roads began under the BJP-led government but took off since 2004. Rural road-building allocations have gone up 10-fold over the last 10 years.

Look at the Blind Side

Taking advantage of this network is the way to beat food inflation, not a price stabilisation fund. No fund could have stopped onion prices from zooming when a part of the crop failed to come to the market. Yes, farmers do need freedom from the middlemen's clutches mandated by the Agricultural Produce Marketing Committee Act (the Congress chief ministers now exempting perishables from the Act's purview follow the lead of Gujarat, where perishables are already exempt, and of Bihar, which abolished APMC).

Rural roads, rural power, commodity exchanges and climate-controlled warehouses whose receipts are negotiable instruments are what India needs to combat food inflation (apart from an embargo on morons at the food ministry). Of these, roads, commodity exchanges, warehouse regulator and receipts that can be discounted for cash are in place.

Power lines have been drawn to 4.6 lakh villages, but thanks to Coal India's disastrous monopoly over coal, power still does not flow along much of those lines. Once all of India's 2,29,000 MW of power generation capacity — more than half of that was added since 2004 — starts generating power, rural areas will see agro-processing industries and cold storages. These will integrate farmers in the villages with national and global demand, dampen volatility in price and volumes. A price stabilisation fund makes sense to supplement this framework, not in its place.

High-speed trains are commercial duds across the world (except for two, short-haul lines). They, like ghost cities built far ahead of the actual need, are totems of command-andcontrol grandeur. In India, where capital is not subsidised, demand comes first, supply follows. Yes, India will urbanise fast as industry and services grow faster than agriculture, absorb more labour and shift people from village to town.

Many Roads to Growth

If India's urban population were to grow by 25 crore over the next 20 years, India will need more than 20,000 sq km of additional urban land.

Whether these townspeople should be packed into 16 new cities, each the size of Delhi, or 150, is a function of many things, many of them related to organic growth, some to new concepts of urban planning and none to Tughlaqian epiphany.

But the main problem with Modi's stated economic vision is not in itself, but in the unstated political vision of his chief sponsor, the Rashtriya Swayamsevak Sangh (RSS).

Blighted Vision

It abhors India's syncretic tradition, in which every individual is free to reach his spiritual equilibrium in his own way, recognises no deviance in the worship of any god or of no god. The RSS wants to replace that tradition with its own brand of Hindutva.

It wants India not as a liberal democracy but as a land of and for Hindus, where followers of other religions exist as second-class citizens, in the words of the Sangh's venerated guru Golwalkar.

The diverse nation that India is can prosper only as a multicultural democracy, not as a Hindu majoritarian state. Any attempt to create one will be fraught with violence, civilian and state, violence that will consume prosperity and blow up gleaming new towns. Modi the efficient administrator is also Modi, proponent and implementer of the Sangh's blighted vision. That is the problem.